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TMI Blog2020 (10) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has duly brought on record affidavits of the family members owning jewellery. Just because the claim is made otherwise then by revised return the said claim does not seize to be a claim to be adjudicated as long as the claim is made. Hon'ble Supreme Court s decision in the case of Shelly Products [ 2003 (5) TMI 4 - SUPREME COURT] , supports the proposition that if the assessee has erroneously paid more tax than he was legally required to do, he is entitled to claim the refund, as otherwise it would be violative of Article 265. Thus hold that the jewellery found was within the limit fixed by CBDT as per Instruction No. 1994 dated 11.5.1994. The authorities below have erred in rejecting the assessee s claim - Decided in favour of assessee. - I.T.A. No. 6670/Mum/2019 - - - Dated:- 21-10-2020 - Shri Shamim Yahya (AM) For the Assessee : Dr. K. Shivram Mr. Rahul Hakani For the Department : Shri Somnath Wajale ORDER This appeal by the assessee is directed against the order of Learned Commissioner of Income Tax (Appeals) [in short learned CIT(A)] dated 30.8.2019 and pertains to assessment year 2016-17. 2. The grounds of appeal read as under :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. A subsequent statement of Mr Jiten Vora was recorded under Section 132 (4) of the Income Tax Act 1961 on 06062015 In the course of this statement while answering Questions bearing Nos. 12 and 15 the assessee claimed that the jewellery was in the nature of streedhan received by his wife presents received at the birth of son and other occasions ancestral jewellery and gifts received from family friends on the occasion of marriage jewellery inherited from grandparents etc. 4. The assessee filed return of income for Assessment Year 2016 17 on 17102016 In this return of income the assessee declared the aforesaid jewellery of ₹ 2705934 Assessee vide letter dated 18102016 submitted that though the jewelry of ₹ 2705934 did not belong to him he was offering the same as his income to buy peace and avoid litigation. 5. Assessee vide submission dated NIL explained the source of above jewelry found from lockers It was submitted that none of the jewelry belonged to assesse Assessee also gave details of family members to whom the said jewelry belonged 6. Though the Assessee had explained during the course of Assessment proceedings that the said jewelry did not belon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is other family members and also explained to AO during the course of assessment proceedings that the jewelry did not belong to him 3. The Id Assessing Officer failed to appreciate that the jewellery found belonged to various family members and was within the CBDT limit as given in CBDT Instruction No 1916 dated 11.05.1994 and hence the same is not unexplained. 6. However, learned CIT(A) did not adjudicate the grounds raised before her. She held that the assessee should have filed a revised return and she proceeded to dismiss the assessee s appeal by observing as under :- However, the assessee filed an appeal against the assessment order wherein the Ld.AO did not make any addition but has merely accepted the Returned income. Even during the assessment proceedings, the assessee submitted to the Ld.AO to accept his voluntary disclosure of jewellery and has nowhere requested the Ld.AO to not to treat this as his income. Whether he offered the income to buy peace or end litigation is immaterial. The fact remains that he has offered this as income at the time of search and while filing the Return of income and also during the assessment proceedings. If the assessee felt he had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as under : LOCKER NO. OWNER 375 Bhavanji M Vora and Kankuben B Vora 449 Kankuben B Vora Bhavanji M Vora and Jiten B Vora 499 Paresh B Vora Kankuben B Vora Arpita PVora 474 Jiten B Vora Kankuben Vora and Varsha J Vora 3. Statement of Assesee was recorded under Section 132(4) of the Income Tax Act 1961 on 10.04.2015. [Pg.l3-15]In answer to Questions No 6, 7 assessee stated that the jewellery in question belongs to him and his family. - Q.No. 10. (Pg 15). The jewellery was released, upon the assessee making payment of ₹ 27,05,934/- by demand draft. 4. A subsequent statement of Assessee was recorded under Section 132(4) of the Income Tax Act 1961 on 06.06.2015 during the course of search of his HUF.[Pg. 6-24] In the course of this statement, while answering Questions bearing Nos. 12 and 15,[Pg 21-22] the assessee claimed that the all the jewelry found during search was mostly in the nature of streedhan received by his wife, presents received at the birth of son and other occ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, if he can explain and demonstrate in the assessment proceedings that the jewelry admitted by him in the search proceedings do not belong to him. 3. Case Laws (i) In CIT v Rakesh Ramani[2018] 94 taxmann.com 461 (Bom)(HC)/[2018] 256 Taxman 299 (Bom)(HC) it is held that There is no requirement in law that evidence in support of its case must be produced only at the time when the seizure has been made and not during the assessment proceedings. . (ii) In Balmukund Acharya v DCIT [2009] 310 ITR 310 (Bom)(HC) [Pg 68- 74] Assessee had offered Long Term Capital gains on sale of Godown to tax. However, before CIT(A) for the first time, Assessee contended that the sale of Godown was not taxable.CIT(A) did not decide the claim of Assessee. ITAT confirmed the order of CIT(A). Order of ITAT was set-aside by the High Court. It has been held by the High Court at Para 31 [Pg 74 of Paper Book II]as under Having said so, we must observe that the Apex Court and the various High Courts have ruled that the authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If any assessee, under a mistake, misconce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laims were made. In the case of Mitesh Implex, CIT(Appeals) entertained both the claims ignoring Revenue's objection. The assessing officer was granted opportunity to oppose the claims on merits. After examination of facts on record, he disallowed the assessee's claim under section 80-IB on the ground that the manufacturing activity had not commenced during the year under consideration to enable the assessee to make such a claim. He however, accepted the assessee's claim on merits under section 80HHC of the Act. In appeal, the Tribunal rejected the Revenue's contention that in view of the judgment of the Supreme Court in the case of Goetze (India) Ltd. v. CIT [2006] 284 ITR 323/157 Taxman 1, such claims could not have been made without filing revised return. There is some ambiguity whether the Tribunal had allowed the assessee's claim under section 80-IB of the Act on merits also or not. Counsel for the assessees, however, clarified that in the case of Mitesh Implex since CIT(Appeals) had rejected the claim on merits, the assessee would not contend that the judgment should be read as also granting such claim on merits. The High Court after considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e first time before the appellate authority without resorting to revising the return before the Assessing Officer. Therefore, any ground, legal contention or even a claim would be permissible to be raised for the first time before the appellate authority or the Tribunal when facts necessary to examine such ground, contention or claim are already on record. In such a case the situation would be akin to allowing a pure question of law to be raised at any stage of the proceedings. This is precisely what has happened in the present case. The Appellate Commissioner and the Tribunal did not need to nor did they travel beyond the materials already on record, in order to examine the claims of the assessees for deductions under sections 80-IB and 80HHC of the Act. (v) InCIT v Pruthvi Brokers Shareholders [2012] 349 ITR 336 (Bom)(HC) [Pg 86-94] which held that an assessee is entitled to raise before appellate authorities additional grounds in terms of additional claims not made in return filed by it. It was held as under : 10. A long line of authorities establish clearly that an assessee is entitled to raise additional grounds not merely in terms of legal submissions, but also a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f to the Assessee if any amount though offered to tax is not taxable. (vii) The Hon'ble Andhra Pradesh High Court in the case of CIT v. Bakelite Hylam Ltd. [1999] 237 ITR 392(AP)(HC)[Pg 96-101 of P.Book II] as well Hon;ble Gujarat High Court in the case of Gujarat Gas Co. Ltd. v. Jt. CIT [2000] 245 ITR 84(Guj)(HC) [Pg 107-126 of P.Book II] has held after considering CBDT circular Circular No. 549, dated 31-10-1989 that Assessed income can fall below the returned income. In CIT v Bakelite Hylam Ltd (Supra) it was held as under : ..........we are inclined to hold that the assessing authority is entitled to determine the quantum of refund also in a regular assessment made under section 143(3). (viii) Mumbai Tribunal in Sajjan India Ltd. v ACIT [2018] 89 taxmann.com 21(Mum)(Trib.)[Pg 102-106] was dealing with legal issue whether disallowance u/s 14A can fall below disallowance suo motu voluntarily made by the assessee in the return of income filed with the Revenue. It was held as under : The last grievance under these appeal is of the assessee as to whether the disallowance u/s 14A can fall below disallowance suo motu voluntarily made by the assessee in the return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (Supra) CIT v Rakesh Ramani (Supra) ] (b) Assessee can make a fresh claim for the first time even before the CIT(A) even though Assessee did not make such claim in the original Return of Income or Revised Return of Income or during the course of Assessment proceedings. [See CIT v Miteshlmpex (Supra), Pr CIT v UTI Bank Ltd (Supra) CIT v Pruthvi Brokers Shareholders (Supra)]. (c) It is incumbent upon revenue authorities to grant relief to Assessee if Assessee wrongly offers any amount to tax in the Return of Income. [See Circular No. 14(XL-35), dated 11-4-1955 ] (d) If after adjudication of New claim, the taxable income falls below the Returned Income, then same is legally permissible. [ CIT v. Bakelite Hylam Ltd. (Supra) Gujarat Gas Co. Ltd. v. Jt. CIT (Supra) and Sajjan India Ltd v ACIT (Supra).] 5. Without prejudice to above on merits; the bulk of the jewellery found during search from various residential premises relates to Stridhan obtained at the time of marriage of the three lady members of the family ie Mrs. Kankuben Vora, Mrs. Arpita Vora and Mrs.Varsha Vora. The details of marriages are as follows: Marriage Year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Brother's son 100g Total 2,100g 8. In DCIT v Haroon Unni (ITA 463/Mum/2012) dated 31.01.2014. (Mum)(Trib) [Pg 130-133 of P.Book II) In that case, gold jewellery of ₹ 20.71 lakhs and diamond jewellery of ₹ 5.67 lakhs was found during a search. The AO taxed the diamond jewellery and a portion of the gold jewellery. The CIT(A) deleted the addition on the ground that the jewellery found was within the CBDT limit. The order of the CIT(A) was upheld by the Mumbai ITAT. 9. In Ritu Bajaj v DCIT (ITA 4101/Del/2017) dated 09.03.2018 (Del)(Trib) [Pg 134-141 of P.Book II]. In that case, diamond studded jewellery of ₹ 24.09 lakhs was found during a search and added to the total income by the AO. The CIT(A) partly confirmed the addition. The Hon'ble ITAT deleted the addition on the ground that the jewellery found was within the CBDT limit. 10. In CIT v Satya Narain Patni (2014) 46 taxmann.com 440(Raj)(HC) [Pg 142-148 of P.Book II] it is held that once jewelry is found within CBDT Circular limit then officers cannot question source and acquisition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the said decision would not debar Tribunal from adjudicating a claim, that was raised otherwise then by revised return of income. Assessee s affidavits belonging to various family members, which were brought on record ought to have been considered in the light of the Hon'ble Bombay High Court decision in the case of CIT Vs. Rakesh Ramani (supra), which provides that there is no requirement in law that evidence in support of the case must be produced only at the time when seizure has been made and not during the course of assessment proceedings. 11. Learned Counsel of the assessee has further submitted that the assessee has duly submitted necessary affidavits from the family members as to the quantity of jewellery which belonged to them. He submitted that from the above sequence of events and evidences it is clear that the assessee has clearly demonstrated jewellery did not belonging to him but belongs to other family members. He further submitted that there is no estoppel against law. That the jewellery was belonging to other family members and if the assessee has erroneously or under compulsion offered the same as his own it does not bring upon any legal bar upon the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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